Email may not be enough for counsel to take action – Corporate / Commercial Law
United States: Email may not be enough for tips to take action
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Q: Our board of directors often has to act quickly outside of our regular meetings. Can we just vote by email?
A: While email voting may appear to be an efficient way of conducting business, a board of directors may not use email to take an ordinary majority vote. An email exchange is not considered a valid meeting under the New Hampshire Business Corporation Act, which requires all participating directors to be able to hear each other simultaneously during the meeting.
Rather, directors can use email to authorize an action by unanimous written consent if that method is not otherwise precluded by the articles of incorporation or bylaws of the company. Action by unanimous written consent requires that the vote be both: (i) unanimous (although only a majority vote would be required at a meeting); and (ii) in writing, signed by each director and included in company records.
The requirement of unanimity makes this method best suited to non-controversial decisions or actions that have already been discussed and deliberated by the board at a prior meeting, because the action is not valid if even a director does not. not give consent.
Unanimous written consent must clearly indicate the action to be taken and must be signed by each director. Under New Hampshire corporate law, the definition of “sign” or “signature” requires an intention to sign or authenticate a document, and includes a manual signature, facsimile (scanned), compliant. or electronic, which is broadly defined as “a sound, symbol, or process attached or logically associated with a recording.”
A carefully crafted email requesting a ‘yes’ vote from each director and an affirmation of their intention to sign could be considered a signed document, but this is not the recommended method as it can lead to unclear responses and cumbersome recording. keeping. It may also not be recognized as a valid action by third parties such as banks.
A best practice is for administrators to sign a printed copy of the consent and email a scanned copy to the corporate secretary or attorney to be compiled, or to use electronic signature software such as DocuSign or RightSignature, which Streamlines the process by allowing administrators to sign in securely. documents without the need for a printer or scanner. Both methods allow admins to take meaningful corporate action via email as long as there is unanimous approval.
Know the Law is a bi-monthly column sponsored by McLane Middleton. Questions and ideas for future columns should be emailed to [email protected] Knowing the Law provides general legal information, not legal advice. We recommend that you consult a lawyer for advice specific to your particular situation.
Posted in Union Leader (10/10/2021)
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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